…as gross written premiums hit N124.2bn in 2023
Leadway Assurance Limited’s underwriting income was impacted by significant claims in the engineering and oil and gas business lines, further compounded by the effects of the naira devaluation, leading to a negative insurance result of N20.7 billion in the Full Year 2023 period.
However, the overall financial performance for the year under review was bolstered by investment income from a large investment portfolio and significant unrealised gains from price and exchange rate movements.
The total investment portfolio of N556.9 billion (USD619. 2 million) as at 31 December 2023 (2022: N417.0 billion) was dominated by local currency government bonds, which accounted for 59.4% of the investment portfolio.
The capital base was significantly boosted by substantial unrealised foreign exchange gains of N68.2 billion from its net asset FCY position as at end-2023.
Leadway is a composite insurer with a strong domestic franchise in Nigeria and growing operations in Cote D’Ivoire through two subsidiaries: Leadway Vie, a life business and Leadway IARD, a short-term business.
These subsidiaries collectively contributed 9.4% to Gross Written Premiums (GWP) in 2023, up from 1.8% in 2022, with growth largely from the non-life business.
Leadway’s GWP grew by 34.3% to N124.2 billion (c. USD138 million) in 2023, maintaining about 12% of premiums generated in the primary market.
The annuities business accounted for over 40% of Net Written Premiums (NWP).
The Insurer’s regulatory solvency margin ratio was strong at 8.4x (2022: 5.2x) in the same year.
Leadway’s strong capitalisation is supported by good earnings generation and retention and is evidenced by shareholders’ funds of N144.3 billion (USD160.5 million) as of 31 December 2023.
However, the net loss ratio spiked to 157.0% and culminated in a combined ratio of 190%.
The combined ratio is typically expressed as a percentage. A ratio below 100 percent indicates that the company is making an underwriting profit, while a ratio above 100 percent means that it is paying out more money in claims that it is receiving from premiums.
Even if the combined ratio is above 100 percent, a company can potentially still be profitable because the ratio does not include investment income.
“Over the next 12-18 months, we expect continued growth in the premium income to maintain Leadway’s leading position in the Nigerian market, supported by a wide distribution network, products drive and strong brand,” GCR Ratings said.
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